Monday, July 21, 2008

Tax-Free Holiday, Sales Combine for Big Savings

Chances are your child will need clothes, school supplies and maybe even a computer before the school year rolls around. To lessen the budgetary blow, purchase these items during Georgia’s Back-to-School Sales Tax Holiday, says a financial expert with the University of Georgia.
The holiday will be July 31 - Aug. 3. During this tax-free window certain purchases will be exempt from state and local sales taxes. Clothing, personal computers and accessories and school supplies are on the tax-free list.

Clothing, including shoes, is exempt from sales tax as long as the item costs $100 or less. Jewelry, watches or watchbands, eye wear, handbags and umbrellas are not exempt.

For computers and accessories for personal use, the tax-free limit is $1,500 for a single purchase. UGA Cooperative Extension consumer economics specialist Michael Rupured urges consumers to take a tally of their computer-related items before heading to the register.

“If the purchase exceeds $1,500, the entire purchase is not exempt from the sales tax,” he said. “Aside from that limitation, practically anything needed to setup and operate a computer at home is exempt.”

To avoid missing out on the tax break, Rupured suggests purchasing computer hardware at one store and software and other accessories at another. And, before you make any computer purchase, do a little window shopping to see which retailer offers the best bargain.

School supplies up to $20 per item are also exempt from the sales tax during the holiday. Make a list of the school supplies your child will need to avoid making unnecessary purchases.

Saving 6 or 7 percent on purchases may not sound like much, but coupling this break with retail sales can result in a substantial savings, he said.

“Do a little research and check advertisements and fliers for sales,” Rupured said. “The sales-tax holiday has become so big now that most retailers offer big sales to attract more business.”

Don’t bring your children along for the shopping excursion, unless you are purchasing their clothes.

“Most of the time you’ll spend less without the kids around,” he said. “Go out by yourself to purchase school supplies and computers and accessories. While you are out, make note of any particularly good clothing sales and return to those stores later during the holiday with the kids.”

The tax-free holidays are designed to help Georgians save, not spend, money. Rupured discourages consumers from buying items on credit during the tax-free days.

“Unless you pay the balance in full with each statement, the interest you pay on a credit card balance can be high enough to offset any savings,” he said. “To avoid temptation, leave your credit cards at home.”

For an entire list of which items will and will not be exempt during the tax holiday, see the Georgia Department of Revenue Web site at

By Sharon Omahen
University of Georgia

Sharon Omahen is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.

No comments: